The pineal organ is still an enigma in regard to its developmental and phylogenetic origin. Little is known of the mechanism involved in determination and differentiation of pineal cells and virtually no studies have been done on the induction and tissue interactions during pinealogenesis. Interest is also centered on the evolutional transformation in structure and function, which may be related to the developmental alterations in pineal morphogenesis between the lower and higher vertebrate species. For developmental studies, avian embryos have great advantages for various experimental manipulations, such as cell and organ culture, surgical operation, and in situ transfection of developmental genes. The present review describes our cell culture studies, which have been done on developing rat and quail pineal organs, in order to elucidate the developmental potency of pineal cells and the regulatory mechanism involved in the phenotypic expression of cell properties. A number of phenotypes including numerous neuron-specific substances are shown immunohistochemically to be expressed only under culture conditions, and not observed in the mature pineal organ. As development proceeds, some of the potencies for cell differentiation are lost; hence, in the mature pineal organs most neuronal phenotypes are not expressed. Numerous factors were discovered which affect phenotypic expression of cultured pineal cells in a cell-type-specific manner. These findings, together with immunohistochemical observations on developing pineal organs, reveal that the developing pineal organ is a unique and useful model system for developmental neurobiology and that cell culture techniques offer a powerful tool for the understanding of development and cell differentiation of this particular organ.